As well as being home to countless blue chip shares, the Australian share market is home to a good number of promising small caps.
Two small cap shares that could be worth adding to your watchlist are listed below. Here's what you need to know about them:
Damstra Holdings Ltd (ASX: DTC)
The first small cap to watch is Damstra. It is a growing integrated workplace management solutions provider. Its cloud-based workplace management platform is used by businesses globally to track, manage, and protect their workers and assets.
Demand has been growing strongly in recent years and has continued in FY 2021. For example, during the first half of FY 2021, the company reported a 29.6% increase in revenue to $13.3 million. It then followed this up with a 66% increase in third quarter revenue to $6.9 million.
The good news is that this is still only a fraction of its total addressable market (TAM). Management estimates that its TAM will be worth US$20 billion by 2022. This gives it a very long runway for growth.
Shaw and Partners currently has a buy rating and $1.88 price target on the company's shares.
Mach7 Technologies Ltd (ASX: M7T)
Another small cap ASX share to watch is Mach7. It is a medical imaging data management solutions provider that allows users to create a clear and complete view of the patient. Users then use this to help them inform diagnosis, reduce care delivery delays and costs, and improve patient outcomes.
Demand for its offering has been growing strongly and looks set to continue doing so thanks to favourable industry trends. One of those is teleheath, which management notes is creating a need for this type of technology.
According to management, the company's TAM is estimated to be US$2.75 billion. This gives it a huge opportunity to grow into over the next decade.
Morgans is a fan of the company. It currently has an add rating and $1.68 price target on the company's shares.
